Commentary | 14 September 2010

The return of geo-economics

The return of geo-economics makes the case that our international environment has become one that is marked by an increasingly dense entanglement of issues involving international economics, national security and foreign policy. Geo-economics was born in 1990, inspired by the idea of strategic economic competition between Japan and the United States, and as Japan’s economy faded, the term fell out of use. But in the world of the Great Convergence, geo-economics is making a comeback due to a range of factors including the rise of China and the shift to a more multipolar economy, an increased emphasis on resource security, and the challenges posed by state capitalism.

‘ . . . there seems to be a growing tendency (for good or ill) for governments to view issues of international economics through the prisms of national security and foreign policy as well as through the default one of economic policy.’ 

               The return of geo-economics, p 1

  • Mark Thirlwell

The return of geo-economics makes the case that our international environment has become one that is marked by an increasingly dense entanglement of issues involving international economics, national security and foreign policy. Geo-economics was born in 1990, inspired by the idea of strategic economic competition between Japan and the United States, and as Japan’s economy faded, the term fell out of use. But in the world of the Great Convergence, geo-economics is making a comeback due to a range of factors including the rise of China and the shift to a more multipolar economy, an increased emphasis on resource security, and the challenges posed by state capitalism.

‘ . . . there seems to be a growing tendency (for good or ill) for governments to view issues of international economics through the prisms of national security and foreign policy as well as through the default one of economic policy.’ 

               The return of geo-economics, p 1

  • Mark Thirlwell

Key Findings

  • Geo-economics – a phrase intended to capture the mix of economics, security and foreign policy – is making a comeback.
  • China’s rise, the shift to a multipolar world economy, the challenges of resource security, and the emergence of state capitalism all help explain this return.
  • Geo-economic thinking risks injecting zero-sum thinking into areas such as international trade and investment where such assumptions can be deeply problematic.